SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
x Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 1995 or
Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from
to
Commission file number 0-7660
MULTIVEST REAL ESTATE FUND, LTD. SERIES VII
(Exact name of registrant as specified in its charter)
Michigan 38-6285884
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6100 Glades Road, Suite 205
Boca Raton, Florida 33434
(Address of principal executive offices) (Zip Code)
(407) 487-6700
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such report), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
FORM 10-K
INDEX
PART I Page
Item 1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2 Properties . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 3 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . 6
Item 4 Submission of Matters To a Vote of Security Holders. . . . . 6
PART II
Item 5 Market for Registrant's Partnership Units
and Related Security Holder Matters . . . . . . . . . . . 6
Item 6 Selected Financial Data. . . . . . . . . . . . . . . . . . . 7
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . 8
Item 8 Financial Statements and Supplementary Data. . . . . . . . . 10
(a) Independent Auditors' Report. . . . . . . . . . . . . . 11
(b) Statements of Financial Condition, as of
December 31, 1995 and 1994 . . . . . . . . . . . . . 12
(c) Statements of Operations, for each of the years in the
three year period ended December 31, 1995. . . . . . 13
(d) Statements of Changes in Partners' Capital, for
each of the years in the three year period
ended December 31, 1995. . . . . . . . . . . . . . . 14
(e) Statements of Cash Flows, for each of the years in the
three year period ended December 31, 1995. . . . . . 15
(f) Notes to Financial Statements . . . . . . . . . . . . . 16
Item 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure. . . . . . . . . . . . . . . . 29
PART III
Item 10 Directors and Executive Officers of the Registrant . . . . . 29
Item 11 Executive Compensation . . . . . . . . . . . . . . . . . . . 29
Item 12 Security Ownership of Certain
Beneficial Owners and Management. . . . . . . . . . . . . 29
Item 13 Certain Relationships and Related Transactions . . . . . . . 31
PART IV
Item 14 Exhibits, Financial Statement Schedules, and Reports
on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . 33
Financial information of properties securing mortgage loans is
not included because the registrant has no contractual right
to the information and cannot otherwise practicably obtain the
information.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
FORM 10-K
PART I
ITEM 1 BUSINESS
Formation of the Partnership
The registrant, MultiVest Real Estate Fund, Ltd., Series VII ("Partnership"), is
a Michigan limited partnership which was formed in 1974 primarily for the
purpose of investing in, operating and disposing of improved real estate. The
Partnership is operated by its (Corporate) general partner MultiVest Real
Estate, Inc., a Delaware corporation ("General Partner").
The Partnership originally invested its funds in a shopping center and
apartments which the General Partner considered to have a potential for profit
either through income or gain on resale. The Partnership also attempted to
provide tax shelter benefits for participants when feasible within its primary
investment objective.
Dissolution of the Partnership
The Partnership is currently in the process of dissolution pursuant to its
Agreement of Limited Partnership ("Partnership Agreement"). In 1984, the
Limited Partners of the Partnership voted for the orderly termination and
dissolution of the Partnership and the General Partner is proceeding
accordingly. Since that time, the General Partner has sold the Partnership's
properties pursuant to wrap-around and purchase money mortgage notes which are
secured by the sold properties. Following is a summary of the note balance
which existed at December 31, 1995:
Mortgage Note
Receivable Mortgage
Sale Sale Balance at Note
Date Price 12/31/95 Maturity
Ross Ridge Apartments 11/18/83 $ 5,000,000 $ 4,489,845 11/15/96
For further information on the sale of Partnership property, see Notes 4 and 11
of Notes to Financial Statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
Summary of Business Operations for the Year Ended December 31, 1995
The operations of the Partnership consist of (1) the ownership and management of
Las Cortes Apartments in Dallas, Texas; and (2) collections on the mortgage note
on Ross Ridge Apartments in Baltimore, Maryland and protection of the
Partnership's mortgage interest in the property.
The Partnership owns and operates Las Cortes Apartments in Dallas, Texas. The
Partnership took title to the property on March 7, 1995 after foreclosing on its
previous owner. The previous owner was unable to make the mortgage balloon
payment in the amount of $10,153,932.25 to the Partnership when it came due on
January 15, 1995. After the Partnership took control of the property, a major
renovation program was initiated, including new asphalt drives, new roofs on all
buildings and a complete exterior paint. This program is expected to be
completed in March 1996. The property is on the market for sale.
The Partnership also holds a wrap-around mortgage note on Ross Ridge Apartments,
located in Baltimore, Maryland. The note becomes payable to the Partnership in
November 1996. The General Partner services the mortgage which relates to the
mortgage note. This entails inspecting the property, monitoring payments on
(and the purchaser's ability to pay) the note and, if appropriate, taking action
to protect the Partnership if the purchaser defaults under the note (this
includes beginning, monitoring and settling legal action and, if appropriate,
taking possession of, operating and reselling the property).
The sources of operating income for the Partnership consist of income from the
operations of Las Cortes Apartments, collections on the Ross Ridge Apartments
mortgage note, and interest earned on funds held in reserve pursuant to the
Partnership Agreement.
On October 6, 1995, the owners of Quail Creek Apartments repaid the wrap-around
mortgage note held by the Partnership in the net amount of $654,454.00. The
repayment proceeds, less Partnership expenses and a reduction in Partnership
reserves, resulted in a cash distribution to the Partners in the amount of
$652,181.00 or $29.00 per Partnership unit for the quarter ended December 31,
1995.
For further information regarding the 1995 operations of the Partnership, see
Item 7 - "Management's Discussion and Analysis of Financial Condition and
Results of Operations".
Future Business Operations of the Partnership
The General Partner anticipates continuation of its dissolution and winding up
of the Partnership. Any future cash distributions to the Partners would come
from collections on the mortgage note and any potential cash flow from the
operations and/or sale of Las Cortes Apartments.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
Conflicts of Interest
The Partnership is subject to various conflicts of interest arising out of its
relationship with the General Partner and its affiliates. These conflicts
involve the following:
1. Competition by the Partnership with Other Partnerships for Management
Services: The General Partner serves as a general partner in three other
limited partnerships, all of which were formed to engage in similar
businesses of this Partnership and two of which are presently being wound
up and liquidated. The General Partner may have conflicts of interest in
allocating management time, services and functions among the various
partnerships and any future partnerships and other entities which may be
organized; however, the General Partner believes that is has sufficient
staff to be fully capable of discharging its responsibilities to each
partnership and other entity.
2. Liability of General Partner to Other Partnerships: The General Partner
is generally liable for the Partnership's's recourse obligations, to the
extent not paid by the Partnership. Because the General Partner is a
general partner in other limited partnerships, creditors of any such
partnerships could seek to realize on the assets of the General Partner if
that partnership's assets were insufficient to satisfy its debts. Should
the General Partner at any time have insufficient assets to meet such
obligations, the General Partner could face conflicts of interest with
regard to the manner in which its assets are distributed to meet the
obligations.
3. Real Estate Commissions and Other Commissions Earned by Affiliates: To
the extent the Partnership sells any properties, modifies or refinances
any indebtedness or requires a construction manager, the Partnership may
pay real estate and loan brokerage commissions thereon to brokers or
construction management fees to the construction manager, including an
affiliate of the General Partner, subject to such restrictions and upon
such terms as are provided under the Partnership Agreement.
4. Provision for Property Management and Mortgage Servicing Services for the
Partnership by an Affiliate: An affiliate of the General Partner performs
property management services and mortgage servicing services for the
Partnership. In the opinion of the General Partner, such affiliate is
engaged in accordance with the Partnership Agreement on terms which are
fair and reasonable and no less favorable than could reasonably be
obtained by the Partnership from unaffiliated persons.
5. Provision for Legal Services: The firm of Honigman Miller Schwartz and
Cohn is counsel to the Partnership. It also is counsel to the General
Partner and its corporate affiliates. As such, it provides legal services
to the Partnership in connection with its operations, real property
investment and related matters at its usual rate for such services.
Competition
Las Cortes Apartments is subject to competition from similar properties in its
general location (see Item 2, "Properties")
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
ITEM 2 PROPERTIES
The following is a brief description of Las Cortes Apartments:
Number of Year Construction Percentage of Occupancy
Location Apt. Units Completed at December 29, 1995
Dallas, Texas 260 1970 93.8%
Las Cortes Apartments competes with properties in its immediate area that are of
similar construction and/or age. Occupancy is relatively stable and rent
concessions, although minimal, are a common utilized marketing tool.
The property was foreclosed on by the Partnership on March 7, 1995 (See Item 1 -
"Business" and Note 4 of Notes to Financial Statements)
The Partnership has a beneficial interest in one property formerly owned by the
Partnership. The property was sold on a deferred payment basis for which the
Partnership holds a mortgage note (see Item 1 - "Business" and Notes 4, 5 and 11
of Notes to Financial Statements).
ITEM 3 LEGAL PROCEEDINGS
The Partnership is a defendant, from time to time, in various actions brought by
tenants, contractors, materialmen, and others in connection with the
Partnership's property, many of which are covered by the liability insurance
maintained by the Partnership. The Partnership believes that the effect, if
any, of these suits on the financial condition of the Partnership will not
be material.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5 MARKET FOR REGISTRANT'S PARTNERSHIP UNITS AND RELATED SECURITY
HOLDER MATTERS
To the best knowledge of the General Partner, there is no public trading market
for the Partnership Units. Since such a market does not exist for the resale of
the Units, market prices cannot be ascertained. There are approximately 1,599
holders of the Units as of December 31, 1995.
Cash Distributions to Partners
The following cash distributions were declared by the Partnership during the
past two years:
Distributions Per Unit
For the Quarter Ended Declared Amount
September 30, 1994 $ 5,172,470.00 $ 230.00
December 31, 1995 652,181.00 29.00
$ 5,824,651,00 $ 259.00
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
ITEM 6 SELECTED FINANCIAL DATA
OPERATIONAL SUMMARY
1995 1994 1993 1992 1991
Total revenue $ 1,852,405 $ 1,174,256 $ 1,045,853 $ 1,361,684 $ 1,382,965
Total expenses 1,415,389 1,902,396 1,116,636 1,110,057 896,778
Income (loss) from
existing assets 437,016 (728,140) (70,783) 251,627 486,187
Discount on
settlement of note (274,015) (507,322) - - -
Operations of
disposed properties 57,273 433,033 668,363 650,207 594,218
Income (loss) from
operations 220,274 (802,429) 597,580 901,834 1,080,405
Gain on sale of
real estate 124,998 567,597 - - -
Net income (loss) $ 345,272 $ (234,832) $ 597,580 $ 901,834 $1,080,405
Allocated to:
Limited Partners $ 341,772 $ (232,451) $ 591,522 $ 892,691 $1,069,452
General Partners 3,500 (2,381) 6,058 9,143 10,953
$ 345,272 $ (234,832) $ 597,580 $ 901,834 $1,080,405
Net income (loss)
per Partnership
Unit based on
22,489 average
Partnership Units
outstanding $ 15.35 $ (10.44) $ 26.57 $ 40.10 $ 48.04
Distributions to
Partners $ - $ 5,172,470 $ - $ - $ 545,358
Distribution per
Partnership Unit
based on 22,489
Partnership Units
outstanding $ - $ 230.00 $ - $ - $ 24.25
FINANCIAL CONDITION SUMMARY
Net investment in
real estate $ 4,760,903 $ - $ - $ - $ -
Wrap-around
mortgage notes
receivable, net 2,087,458 5,667,685 13,109,092 12,495,816 12,492,693
Other assets 1,927,524 3,598,569 3,888,471 4,430,184 3,967,354
Total assets $ 8,775,885 $ 9,266,254 $16,997,563 $16,926,000 $16,460,047
Mortgage notes
payable $ 1,143,793 $ 1,862,729 $ 4,538,966 $ 5,060,840 $ 5,540,443
Other liabilities 452,658 569,363 217,133 221,276 177,554
Total liabilities 1,596,451 2,432,092 4,756,099 5,282,116 5,717,997
Partners' capital 7,179,434 6,834,162 12,241,464 11,643,884 10,742,050
Total liabilities
and Partners'
capital $ 8,775,885 $ 9,266,254 $16,997,563 $16,926,000 $16,460,047
Note: The above information and Item 7 - "Management's Discussion and
Analysis of Financial Condition and Results of Operations" should
be read in conjunction with the financial information contained in
Item 8 and elsewhere herein.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The current operations of the Partnership are centered on one apartment complex
owned by the Partnership, collections on a mortgage note received upon sale of
the Partnership's property and protection of the Partnership's mortgage interest
in such property.
The Partnership's total revenues increased $678,149 or 58% in 1995 as compared
to 1994. Interest on wrap-around mortgage notes receivable decreased $611,456 or
59% due to the foreclosure on the wrap-around mortgage note receivable on Las
Cortes Apartments. Rents and other tenant charges during 1995 represent the
rental activity for Las Cortes Apartments since foreclosure (see below).
Total revenues increased by $128,403 or 12% in 1994 over 1993, primarily due to
an increase in other income of $98,316 or 282%. The increase was primarily due
to increased interest on investments following the repayment of the Bolingbrook
Commons Shopping Center and the Woodside Apartments mortgage notes receivable.
Total expenses decreased $487,007 or 26% in 1995 from 1994 primarily due to
payments during 1994 to the General Partner of the investment management
fee/real estate commission (see Note 7 of Notes to Financial Statements), offset
by increases in operating expenses as a result of the resumption of rental
operations of Las Cortes Apartments. Interest expense declined $19,912 or 16%
as a result of continued amortization of the mortgage notes payable principal
balance.
The Partnership's total expenses increased $785,760 or 70% in 1994 from 1993 due
primarily to payments to the General Partner of the investment management
fee/real estate commission.
On January 20, 1993, the Partnership executed a modification of the wrap-around
mortgage note receivable in connection with Ross Ridge Apartments. Under the
modification, the total amount due the Partnership after payment of the October
25, 1993 installment, including all accrued and deferred interest and unpaid
principal in the total amount of $4,580,284, was recharacterized as unpaid
principal and became the principal balance due under the modified note. The
modified note bears interest of 9.5%, and can be prepaid at any time without
penalty. Monthly principal and interest payments are to be made in the amount
of $38,995, with all unpaid principal and interest due November 15, 1996. Under
the agreement, the borrower will reimburse the Partnership $1,200 toward the
costs of two additional property inspections each year.
On October 6, 1995, the Partnership received $654,454 as the net payoff on the
Quail Creek Apartments mortgage note receivable. The amount represents the
difference between (a) the remaining principal plus all accrued interest on the
note, less a discount of $274,015 ($1,259,602) and (b) the principal and accrued
interest on the underlying mortgage note payable with respect to this property
($605,148).
An Investment Management Fee/Real Estate commission in the amount of $95,066 was
earned by the General Partner during 1995. The General Partner has earned a
total of $3,924,953 from inception through December 31, 1995. However,
additional fees may be due the General Partner as the Partnership continues
to receive cash proceeds.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, continued
On January 15, 1995, the owners of Las Cortes Apartments (also known as Lincoln
Terrace Apartments) were required to make a mortgage balloon payment to the
Partnership in the amount of $10,153,932.24 plus $24,170.71 in accrued legal
expenses and out of pocket costs from previous defaults and a tax escrow payment
of $8,292.15. No payment was received by the Partnership and a Notice of
Default was sent to the owners of the property on January 24, 1995. On March 7,
1995, the Partnership foreclosed on the mortgage, took title to the property
and began rental operations.
The liquidity of the Partnership is dependent upon the timely receipt of
income. There are no other credit facilities currently in place and limited
partners have no obligation to provide additional funds in excess of their
initial cash contributions. In order to protect the Partnership in the event of
a reduction in cash flow, management closely monitors the Partnership's cash
position, and, when necessary, will reserve adequate funds to continue to
operate the Partnership in the foreseeable future. Funds so reserved are
generally invested in short-term investments. The Partnership maintains
adequate liquidity on a short-term basis as a result of its cash flow and
reserve policies; however, there can be no assurance of continued collections
on the existing mortgage note or the continued performance of the Partnership's
rental property, which could have a negative effect upon the long-term liquidity
of the Partnership. Funds generated from operations and collections on the
wrap-around mortgage note have primarily been utilized to meet debt service
obligations and, when possible, distribute funds to the Partners. There was no
distribution of funds during the year ended December 31, 1995.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
ITEM 8
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
For each of the years in
the three year period ended
December 31, 1995
Schedules omitted are not required, or the required information
is included in the financial statements or the notes thereto.
Independent Auditors' Report
The Partners
MultiVest Real Estate Fund, Ltd. (Series VII):
We have audited the accompanying statements of financial condition of MultiVest
Real Estate Fund, Ltd. (Series VII) (a Michigan limited partnership) as of
December 31, 1995 and 1994, and the related statements of operations, changes
in partners' capital, and cash flows for each of the years in the three-year
period ended December 31, 1995. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MultiVest Real Estate Fund,
Ltd. (Series VII) (a Michigan limited partnership) at December 31, 1995 and
1994, and the results of its operations and its cash flows for each of the
years in the three-year period ended December 31, 1995, in conformity with
generally accepted accounting principles.
March 21, 1996 KPMG Peat Marwick LLP
Fort Lauderdale, Florida
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
(a Michigan limited partnership)
STATEMENTS OF FINANCIAL CONDITION
December 31, 1995 and 1994
ASSETS 1995 1994
Investments in real estate
Land $ 1,900,000 $ -
Building and improvements 2,986,895 -
4,886,895 -
Less: Accumulated depreciation 125,992 -
Net investment in real estate 4,760,903 -
Wrap-around mortgage notes
receivable (Note 4) 4,489,845 13,655,214
Less unamortized discount (Note 4) - (17,215)
Allowance for loss on wrap-around
mortgage note receivable (Note 4) - (125,000)
Deferred gain on sales of
real estate (Note 11) (2,402,387) (7,845,314)
2,087,458 5,667,685
Other assets
Cash 5,270 21,060
Investments, at cost which
approximates market (Note 3) 1,850,930 1,647,000
Accounts receivable 6,447 43,643
Prepaid insurance 44,867 -
Escrow deposits and other assets 20,010 -
Deferred interest receivable (Note 4) - 1,886,866
Total other assets 1,927,524 3,598,569
Total assets $ 8,775,885 $ 9,266,254
LIABILITIES AND PARTNERS' CAPITAL
Mortgage notes payable (Note 5) $ 1,143,793 $ 1,862,729
Accounts payable 176,106 5,401
Accrued liabilities (Note 6) 188,591 918
Accrued liabilities to affiliates (Note 7) 36,176 10,574
Security deposits 51,785 -
Unfunded distributions payable - 552,470
Total liabilities 1,596,451 2,432,092
Partners' capital (Notes 8 and 10)
Limited Partners, 22,261 units 7,100,786 6,759,014
General Partners, 228 units 78,648 75,148
Total Partners' capital 7,179,434 6,834,162
Total liabilities and
Partners' capital $ 8,775,885 $ 9,266,254
See Notes to Financial Statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
(a Michigan limited partnership)
STATEMENTS OF OPERATIONS
For each of the years in the
three year period ended December 31, 1995
1995 1994 1993
Revenues
Rents and other tenant
charges $ 1,177,494 $ - $ -
Interest on mortgage notes
receivable (Note 4) 429,658 1,041,114 1,011,027
Other income 245,253 133,142 34,826
1,852,405 1,174,256 1,045,853
Expenses
Maintenance custodial salaries
and related expenses 110,007 - -
Real estate management fees 77,574 - -
Investment management fee/real
estate commission -
affiliate (Note 7) 95,066 1,637,220 809,600
Mortgage servicing fee -
affiliate (Note 7) 11,911 21,797 18,954
Property taxes 128,397 - -
Depreciation and amortization 125,992 - -
Insurance 48,019 - -
Utilities 336,247 - -
Repair and maintenance 226,147 - -
Legal and accounting 17,649 25,239 34,597
Interest (Note 12) 101,425 121,337 150,030
Administrative and other 136,955 96,803 103,455
1,415,389 1,902,396 1,116,636
Income (loss) from existing
assets 437,016 (728,140) (70,783)
Operations of disposed
properties (Note 13) 57,273 433,033 668,363
Discount on settlement of
note (Note 4) (274,015) (507,322) -
Gain on sale of real estate 124,998 567,597 -
Net income (loss) $ 345,272 $ (234,832) $ 597,580
Allocated to
Limited Partners,
22,261 units $ 341,772 $ (232,451) $ 591,522
General Partners,
228 units (Note 8) 3,500 (2,381) 6,058
$ 345,272 $ (234,832) $ 597,580
Net income (loss) per
Partnership Unit based
on 22,489 average units
outstanding $ 15.35 $ (10.44) $ 26.57
See Notes to Financial Statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
(a Michigan limited partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For each of the years in the
three year period ended December 31, 1995
General Limited
Partners Partners Total
Partners' capital, January 1, 1993 $ 123,911 $ 11,519,973 $ 11,643,884
Net income for 1993 6,058 591,522 597,580
Balance, December 31, 1993 129,969 12,111,495 12,241,464
Net loss for 1994 (2,381) (232,451) (234,832)
Distribution to Partners (52,440) (5,120,030) (5,172,470)
Balance, December 31, 1994 75,148 6,759,014 6,834,162
Net income for 1995 3,500 341,772 345,272
Partners' capital, December 31, 1995 $ 78,648 $ 7,100,786 $ 7,179,434
Partnership units outstanding
at December 31, 1995, 1994
and 1993 228 22,261 22,489
See Notes to Financial Statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
(a Michigan limited partnership)
STATEMENTS OF CASH FLOWS
For each of the years in the
three year period ended December 31, 1995
Increase in Cash and Cash Equivalents
Operating Activities 1995 1994 1993
Net income (loss) $ 345,272 $ (234,832) $ 597,580
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities:
Amortization of discount on
mortgage note receivable (17,215) (25,824) (25,824)
Depreciation 125,992 - -
Gain on sale of property (124,998) (567,597) -
Discount on settlement of note 274,015 507,322 -
Changes in assets and liabilities:
Decrease in interest receivable 11,863 19,274 8,579
Increase in prepaid expenses (44,867) - -
Increase in escrow deposits (20,010) - -
Decrease in deferred interest income - 629,000 -
Increase (decrease)in accounts payable 170,705 (8,105) (3,869)
Increase (decrease) in accrued
liabilities 187,673 (309) (274)
Increase (decrease) in accrued
liabilities to affiliates 25,602 (191,826) -
Increase in security deposits 51,785 - -
(Decrease) increase in unfunded
distributions payable (552,470) 552,470 -
Net cash provided by
operating activities 433,347 679,573 576,192
Investing Activities
Capital improvements to real estate (817,625) - -
Payoff received on Woodside Apartments
mortgage note receivable - 6,892,678 -
Payoff received on Bolingbrook Commons
Shopping Center mortgage note receivable - 600,000 -
Payoff received on Quail Creek Apartments
mortgage note receivable 1,253,068 - -
Payments received on wrap-around
mortgage notes receivable 38,286 34,828 26,214
Net cash provided by
investing activities 473,729 7,527,506 26,214
Financing Activities
Principal payoff on Quail Creek
Apartments mortgage note payable (600,039) - -
Principal payoff on Woodside Apartments
mortgage note payable - (2,179,565) -
Principal payments on mortgage
notes payable (118,897) (496,672) (521,874)
Distributions to partners - (5,172,470) -
Net cash used in financing
activities (718,936) (7,848,707) (521,874)
Increase in cash and cash equivalents 188,140 358,372 80,532
Cash and cash equivalents -
beginning of year 1,668,060 1,309,688 1,229,156
Cash and cash equivalents -
end of year $1,856,200 $1,668,060 $1,309,688
Non-Cash Activities
Reclassification of Ross Ridge
Apartments Mortgage Note Receivable:
Increase in mortgage note receivable - - 613,666
Decrease in deferred interest receivable - - (596,999)
Decrease in interest receivable - - (16,667)
Foreclosure on Las Cortes Apartments:
Decrease in wrap-around mortgage
note receivables (7,600,000) - -
Decrease in deferred gain on sale 5,442,927 - -
Decrease in deferred interest
receivable (1,886,866) - -
Decrease in interest receivable (25,333) - -
Foreclosed property 4,069,272 - -
See Notes to Financial Statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 1995, 1994 and 1993
1. Summary of Significant Accounting Policies
Assets
The Partnership's assets are carried at the lower of cost or estimated fair
value. All subsequent expenditures for improvements are capitalized. The
costs of repairs and maintenance are charged to expense as incurred. Upon
sale or retirement, the cost and related accumulated depreciation are
removed from the accounts and any gain or loss is reflected in income in
accordance with Statement of Financial Accounting Standards No. 66.
The Partnership adopted Statement of Financial Accounting Standards No.
121 - Accounting for the Impairment of Long Lived Assets and for Long
Lived Assets to Be Disposed Of - on January 1, 1995, and accordingly
evaluates its real estate investments periodically to assess whether any
impairment indications are present, including recurring operating losses
and significant adverse changes in legal factors or business climate that
affect the recovery of the recorded value. If any real estate investment
is considered impaired, a loss is provided to reduce the carrying value
of the property to its estimated fair value. The implementation of this
standard had no financial impact on the financial statements.
Depreciation
The Partnership depreciates land improvements, buildings and building
improvements using the straight-line method over the estimated useful lives
of the assets. Depreciation is computed using the following useful lives:
Years
Land Improvements 3 to 10
Buildings 16 to 28
Building Improvements 3 to 10
Accounting for Real Estate Sales
Sales of real estate are accounted for in accordance with Statement of
Financial Accounting Standards No. 66 - Accounting for Sales of Real Estate.
For sales of real estate where both cost recovery is reasonably certain and
the collectibility of the contract price is reasonably assured, but the
transactions do not meet the remaining requirements to be recorded on the
accrual basis, profit is recognized under the installment method which
recognizes profit as collections of principal are received. If developments
subsequent to the adoption of the installment method occur causing the
transaction to meet the requirements of the full accrual method, the remaining
deferred profit is recognized at that time.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts in the financial statements and
accompanying notes. Actual results could differ from those estimates.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
NOTES TO FINANCIAL STATEMENTS, continued
For the years ended December 31, 1995, 1994 and 1993
1. Summary of Significant Accounting Policies, continued
Fair Value of Financial Instruments
The fair values of the Partnership's financial instruments, including mortgage
notes and accounts receivable, mortgage notes and accounts payable, accrued
expenses, security deposits, and other financial instruments, generally
determined using the present value of estimated future cash flows using a
discount rate commensurate with the risks involved, approximate their carrying
or contract values.
Cash Equivalents
For purposes of the Statements of Cash Flows, all highly liquid investments
purchased with a maturity of three months or less are considered to be cash
equivalents. These investments consist principally of repurchase agreements
and Treasury Bills.
Reclassifications
Certain reclassifications have been made in the 1993 and 1994 financial
statements to conform to the presentation of 1995 results of operations.
Notes Receivable
Notes receivable are recorded at cost less the related allowance for impaired
notes receivable. The Partnership adopted the provisions of Statements of
Financial Accounting Standard No. 114, Accounting by Creditors for Impairment
of a Loan, as amended by SFAS No. 118, Accounting be Creditors for Impairment
of a Loan-income Recognition and Disclosure, on January 1, 1995. Management,
considering current information and events regarding the borrowers ability to
repay their obligations, considers a note to be impaired when it is probable
that the Partnership will be unable to collect all amounts due according to
the contractual terms of the note agreement. When a loan is considered to be
impaired, the amount of the impairment is measured based on the present value
of expected future cash flows discounted at the note's effective interest
rate. Impairment losses are included in the allowance for doubtful accounts
through a charge to bad debt expense. Interest is recognized on a cash
basis for impaired loans. The implementation of these standards had no
financial impact on the financial statements.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
NOTES TO FINANCIAL STATEMENTS, continued
2. Real Estate and Accumulated Depreciation
Real estate and accumulated depreciation at December 31, 1995 consisted of
the following:
Cost
Partnership Capitalized Gross Amount at Which Life on Which
Cost to Subsequent to Carried at Close of Depreciation in
Re-acquire Re-acquisition Period Latest Statement
Buildings and Building and Accumulated Date of Date of Operations is
Description Encumbrances Land Improvements Improvements Land Improvements Total Depreciation Construction Re-acquired Computed
Las Cortes
Apartments,
Dallas,
Texas - 1,900,000 2,169,272 817,623 1,900,000 2,986,895 4,886,895 125,992 1971 3/7/95 2 - 16 years
The cost basis of the property for federal tax purposes is $3,426,699. The primary
difference between such basis and the amount reflected in the financial statements
is a gain recognized for tax purposes on repossession of the property.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
NOTES TO FINANCIAL STATEMENTS, continued
2. Real Estate and Accumulated Depreciation, continued
SUMMARY OF CHANGES IN GROSS AMOUNT OF REAL ESTATE
AND ACCUMULATED DEPRECIATION
Gross Amount of Real Estate 1995 1994 1993
Balance at beginning of
period $ - $ - $ -
Additions through foreclosure 4,069,272 - -
Improvements 817,623 - -
Balance at close of period $ 4,886,895 $ - $ -
Accumulated Depreciation 1995 1994 1993
Balance at beginning of
period $ - $ - $ -
Depreciation expense 125,992 - -
Balance at close of period $ 125,992 $ - $ -
3. Investments
Title of Each Class Cost of Each Issue
1995 1994
Repurchase Agreements $ 1,058,000 $ 854,000
Treasury Bills 792,930 793,000
$ 1,850,930 $ 1,647,000
Investments are recorded at cost, which approximates market value, and have
maturities of three months or less. The yield on investments at December
31, 1995 was approximately 5.02%.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
NOTES TO FINANCIAL STATEMENTS, continued
4. Mortgage Notes Receivable
Mortgage notes receivable at December 31, 1995 consisted of the following:
Interest Income
Final Periodic Accrued and Interest Income
Interest Prior Maturity Payment Mortgage Notes Deferred at end Earned Applicable
Rates Liens Date Terms Receivable of Period to Period
1995 1994
Las Cortes Apartments N/A N/A 01/15/95 (B) - 7,600,000 - -
Ross Ridge Apartments 9.5% (A) 11/15/96 (C) 4,489,845 4,528,131 - 429,658
Quail Creek Apartments N/A N/A 08/15/95 (D) - 1,527,083 - 103,082*
4,489,845 13,655,214 - (E) 532,740
*Interest income earned on notes prior to their payoff is included in
operations of disposed properties.
1995 1994 1993
Balance at beginning of period,
net of unamortized discount and
allowance for loss 13,512,998 21,844,174 21,230,898
Add: Amortization of discount 17,216 25,824 25,824
Decrease in imputed interest
on purchase money mortgage
note receivable - payoff of
Bolingbrook Commons Shopping
Center - 77,828 -
Reclassification of Ross Ridge
Apartments mortgage note receivable - - 613,666
Decrease in allowance for
loss on wrap-around mortgage
note receivable - Quail Creek
Apartments 125,000 - -
Less: Collections of principal (38,286) (34,828) (26,214)
Decrease in purchase money
mortgage note receivable - payoff
of Bolingbrook Commons Shopping
Center - (1,000,000) -
Decrease in wrap-around mortgage
note receivable - payoff of
Woodside Apartments - (7,400,000) -
Decrease in wrap-around mortgage
note receivable - foreclosure on
Las Cortes Apartments (7,600,000) - -
Decrease in wrap-around mortgage
note receivable - payoff of
Quail Creek Apartments (1,527,083) - -
Balance at end of period 4,489,845 13,512,998 21,844,174
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
NOTES TO FINANCIAL STATEMENTS, continued
4. Mortgage Notes Receivable, continued
(A) The mortgage note receivable is subordinate to existing first mortgage loan
(see Note 5).
(B) On January 15, 1995, the owners of Las Cortes Apartments (also known as
Lincoln Terrace Apartments) were required to make a mortgage balloon payment
to the Partnership in the amount of $10,153,932 plus $24,170 in accrued
legal expenses and out of pocket costs from previous defaults and a
tax escrow payment of $8,292. No payment was received by the Partnership
and a Notice of Default was sent to the owners of the property on January
24, 1995. On March 7, 1995, the Partnership foreclosed on the mortgage
and took title to the property.
(C) On January 20, 1993, the Partnership executed a modification of the
wrap-around mortgage note receivable in connection with Ross Ridge
Apartments. Under the modification, the total amount due the Partnership
after payment of the October 15, 1993 installment, including all accrued
and deferred interest and unpaid principal in the total amount of
$4,580,284, was recharacterized as unpaid principal and became the principal
balance due under the modified note. The modified note bears interest of
9.5%. Monthly principal and interest payments are to be made in the amount
of $38,995, with all unpaid principal and interest due November 15, 1996.
Under the agreement, the borrower paid all legal and recording costs
associated with the execution of the new loan documents, and will also
reimburse the Partnership $1,200 toward the costs of two additional property
inspections each year.
(D) On October 6, 1995, the Partnership received $654,454 as the net payoff on
the Quail Creek Apartments mortgage note receivable. The amount represents
the difference between (a) the remaining principal plus all accrued interest
on the note less a discount of $274,015 ($1,259,602) and (b) the principal
and accrued interest on the underlying mortgage note payable with respect to
the property ($605,148).
(E) The total interest income accrued and deferred includes cumulative deferred
interest receivable.
Breakdown of interest income accrued and deferred:
Accrued Interest Deferred Interest
1995 1994 1995 1994
Las Cortes Apartments $ - $ 25,333 $ - $ 1,886,866
Quail Creek Apartments - 4,667 - -
$ - $ 30,000 $ - $ 1,886,866
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
NOTES TO FINANCIAL STATEMENTS, continued
5. Mortgage Notes Payable
Mortgage notes payable at December 31, 1995 and 1994 consisted of the
following:
Final
Interest Maturity Monthly Carrying Amount of
Rates Date Payment Mortgage Notes Payable
1995 1994
Quail Creek Apartments
Wichita Falls,
Texas (b) N/A 1995 $ - $ - $ 628,829
Ross Ridge Apartments
Baltimore,
Maryland (a) 8-1/2% 2004 15,961 1,143,793 1,233,900
$ 15,961 $1,143,793 $1,862,729
(a) This property was sold during 1983; see Note 4.
(b) On October 6, 1995, the Partnership received $654,454 as a net payoff on
the Quail Creek Apartments mortgage note receivable. The amount
represents the difference between (a) the remaining principal plus all
accrued interest on the note, less a discount of $274,015 ($1,259,602)
and (b) the principal and accrued interest on the underlying mortgage
note payable with respect to this property ($605,148).
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
NOTES TO FINANCIAL STATEMENTS, continued
5. Mortgage Notes Payable, continued
Principal balance, January 1, 1995 $ 1,862,729
Payoff of Quail Creek Apartments mortgage
note payable (600,039)
Payments of principal (118,897)
Principal balance, December 31, 1995 $ 1,143,793
The mortgage notes payable are collateralized by real estate. The
Partnership has no liability beyond this collateral.
The aggregate annual maturities on mortgage indebtedness are summarized as
follows:
Years ending December 31
1996 98,072
1997 106,741
1998 116,175
1999 126,444
2000 137,621
Thereafter 558,470
$1,143,793
6. Accrued Liabilities
Accrued liabilities at December 31, 1995 and 1994 consisted of the
following:
1995 1994
Real estate taxes $ 155,882 $ -
Utilities 27,771 -
Payroll 4,938 918
$ 188,591 $ 918
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
NOTES TO FINANCIAL STATEMENTS, continued
7. Related-Party Transactions
The following list of expenses incurred and the related liabilities are from
transactions with affiliates:
M.V. National MultiVest Real
Properties, Inc. Estate, Inc.
For the year ended
December 31, 1995 1994 1993 1995 1994 1993
Mortgage servicing
fee $ 15,143* $ 33,087* $ 33,713* $ - $ - $ -
Investment
management
fee/real estate
commission - - - $ 95,066 $1,637,220 $ 809,600
$ 15,143 $ 33,087 $ 33,713 $ 95,066 $1,637,220 $ 809,600
Accrued liabilities
December 31 $ - $ - $ - $ 36,176 $ 10,574 $ 202,400
*Mortgage servicing fees incurred before note payoff (Woodside Apartments;
$-0-, $7,581, and $11,050, respectively, and Quail Creek Apartments;
$3,232, $3,709, and $3,709, respectively) is included in operations of
disposed properties.
MultiVest Real Estate, Inc. is the Corporate General Partner of the
Partnership. The Partnership Agreement permits the Corporate General
Partner to provide certain services and to employ certain subsidiaries to
provide services to the Partnership and obtain reimbursement.
The services provided encompass:
(1) Construction management, acquisition, disposition and financing
services - Property Analysis and Development Corp.
(2) Property management services - M.V. National Properties, Inc.
(3) Mortgage servicing - M.V. National Properties, Inc.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
NOTES TO FINANCIAL STATEMENTS, continued
7. Related Party Transactions, continued
The Partnership Agreement provides for payment to the General Partner of an
investment management fee of 10% of all cash proceeds (defined as net cash
realized from time to time upon the sale, refinancing or other
dispositions by the Partnership of each property, or portion of any
property, after provisions for reserves which may be established in the sole
discretion of the Corporate General Partner). The Partnership Agreement
also provides for payment to an affiliate of the Corporate General Partner
of real estate commissions in connection with properties sold of an amount
not to exceed the lesser of (a) 3% of the total consideration paid therefor,
(b) 50% of a standard real estate commission or (c) 50% of the fees
permissible on the acquisition of a property. According to the Partnership
Agreement, these fees will be paid only after payment to the Limited
Partners of 100% of their initial capital account, plus an amount equal to
12% per annum of the current capital account on a cumulative basis,
including all prior distributions.
No Investment Management Fee/Real Estate Commission was paid to the
Corporate General Partner prior to 1991. However, as of the quarter ended
March 31, 1991, the Limited Partners have received 100% of their Initial
Capital Account (as defined in the Agreement of Limited Partnership of the
Partnership), plus an amount equal to 12% per annum of the Current Capital
Account, (as defined in the Agreement of Limited Partnership of the
Partnership) on a cumulative basis, including all prior distributions. An
Investment Management Fee/Real Estate Commission in the amount of $809,600
was earned by the General Partner during 1993, $1,637,220 was earned during
1994 and $95,066 was earned during 1995. The General Partner has earned a
total of $3,924,953 through December 31, 1995. Additional fees may be due
the General Partner as the Partnership continues to receive cash proceeds.
Future payments of the Investment Management Fees/Real Estate Commissions
are contingent upon a number of factors, and cannot be determined with
reasonable certainty at this time.
In addition, an affiliate of the General Partner has been engaged to service
the wrap-around mortgages held by the Partnership in accordance with the
terms and conditions of a Mortgage Servicing Agreement between the affiliate
and the Partnership. It is anticipated that in order to protect the
Partnership's interest in its assets, such affiliate will continue to
service each wrap-around mortgage or other instrument now or hereafter held
by the Partnership until full payment of the corresponding wrap-around note
or other obligation. Management is of the opinion that the mortgage
servicing transactions were executed for a consideration approximating that
which would have been obtained from wholly unrelated interest. For the year
ended December 31, 1995, the affiliate earned $15,143 for such services.
8. General Partner Participation in Income or Loss
The General Partner presently owns 152 General Partnership units and 10
Limited Partnership units. The two remaining Individual General Partners
each own 38 General Partnership units. In June 1981, an Individual General
Partner resigned and assigned 38 General Partnership Units to the Corporate
General Partner. The General Partner participates in the income and loss of
the Partnership in proportion of Partnership units owned to the total
Partnership units outstanding.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
NOTES TO FINANCIAL STATEMENTS, continued
9. Description of Partnership Operations and Leasing Arrangements
The Partnership operates exclusively in the real estate industry, investing
its funds in rental properties consisting primarily of apartment complexes.
The following is an analysis of the Partnership's investment in property
held for rent for residential purposes as of December 31, 1995:
Residential rental apartments $ 4,886,895
Less: Accumulated depreciation (125,992)
$ 4,760,903
Residential leases are for periods not exceeding one year.
10. Income Taxes
MultiVest Real Estate Fund, Ltd., Series VII is a partnership and has no
liability for federal income taxes. The partners include in their
individual income tax returns their proportionate share of any income or
loss of the Partnership.
Net income, total assets and Partners' capital as reported in the
accompanying financial statements are less than net income, total assets and
Partners' capital as reported in the Partnership's 1995 tax return by
approximately $873,868, $698,213, and $1,225,426, respectively. The
differences result primarily from the recording of certain property sales
on the installment method for tax purposes while the accrual method was
utilized for financial statement purposes. The following are differences
related to net income as of and for the years ended December 31:
1995 1994 1993
Income (loss) per books $ 345,272 $ (234,832) $ 597,580
Depreciation 8,595 - -
Imputed interest (17,216) (701,063) 69,556
Gain recognition 882,489 3,926,771 13,683
Deferred interest - (37,000) 315,800
Other - (325,659) 10,000
Tax income $ 1,219,140 $ 2,628,217 $ 1,006,619
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
NOTES TO FINANCIAL STATEMENTS, continued
11. Deferred Gain on Sales of Real Estate
The deferred gain on sales of real estate at December 31, are summarized as
follows:
Deferred Deferred
Gain Gain
1995 1994
Las Cortes Apartments $ - $ 5,442,927
Ross Ridge Apartments 2,402,387 2,402,387
$ 2,402,387 $ 7,845,314
12. Interest Expense
The Partnership incurs interest expense on mortgage notes payable relative
to properties sold pursuant to wrap-around mortgage notes receivable.
1995 1994 1993
Sold properties subject to
wrap-around mortgages $ 143,000 $ 301,137 $ 417,584
Cash paid during 1995, 1994 and 1993 for interest was $143,000, $301,137 and
$417,584, respectively.
*Interest expense incurred before note payoffs of Quail Creek
(1995, $41,575; 1994, $57,763; and 1993, $61,159) and Woodside Apartments
(1994, $122,037; and 1993, $206,395;) is included in operations of disposed
properties.
13. Operations of Disposed Properties
Woodside Bolingbrook Quail Creek
1995: Apartments Shopping Center Apartments Total
Total revenues $ - $ - $ 103,082 $ 103,082
Total expenses - - (45,809) (45,809)
Net income $ - $ - $ 57,273 $ 57,273
1994:
Total revenues $ 482,752 $ 10,108 $ 137,824 $ 630,684
Total expenses (132,319) (3,632) (61,700) (197,651)
Net income $ 350,433 $ 6,476 $ 76,124 $ 433,033
1993:
Total revenues $ 740,000 $ 80,000 $ 137,824 $ 957,824
Total expenses (218,738) (5,630) (65,093) (289,461)
Net income $ 521,262 $ 74,370 $ 72,731 $ 668,363
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
NOTES TO FINANCIAL STATEMENTS, continued
14. Subsequent Events
A distribution was declared for the quarter ended December 31, 1995, and
paid to the Partners in March 1996 in the amount of $652,181 or $29.00 per
Partnership unit.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
PART II, continued
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership has no directors or officers. The business policy making
functions of the Partnership are carried on through the directors and executive
officers of the General Partner, who are listed below:
RICHARD L. DAVIS, age 46, is President, Chief Executive Officer and Director of
the General Partner and has been associated with the General Partner since
August 1981.
JAMES F. COLGAN, age 61, is a Director of the General Partner and has served in
that capacity since December 1987. Since March 1990, Mr. Colgan has been
President and Director of MultiVest, Inc. From November 1987 to March 1990 he
served as Chief Financial Officer of that company.
PAUL D. TOOMEY, age 45, is Vice President, Treasurer and Secretary of the
General Partner and has been associated with MultiVest Real Estate, Inc. and
MultiVest, Inc., in various capacities since 1972.
There is no family relationship among any of the above named executive officers
and directors of the General Partner.
ITEM 11 EXECUTIVE COMPENSATION
The Partnership has no directors or officers. The General Partner, MultiVest
Real Estate, Inc. operates the Partnership.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
According to the Partnership's records, at January 1, 1996 a group consisting of
the following entities (through their affiliates) is the only individual, entity
or group which is the beneficial owner or has the right to acquire beneficial
ownership of more than 5% of the Limited Partnership Units:
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT, continued
Name of Amount & Nature of Percentage
Title of Class Beneficial Owner Beneficial Ownership of Class
$500 Limited LF 75, L.P. 53 .238
Partnership Units
$500 Limited Liquidity Fund IX 155 .696
Partnership Units
$500 Limited Liquidity Fund X 786 3.531
Partnership Units
$500 Limited Liquidity Fund XI 779 3.499
Partnership Units
$500 Limited Liquidity Fund XIII 386 1.734
Partnership Units
$500 Limited Liquidity Fund XIV 195 .876
Partnership Units
$500 Limited Liquidity Fund XV 57 .256
Partnership Units
$500 Limited Liquidity Fund Income 245 1.101
Partnership Units Growth Fund 53
$500 Limited Liquidity Fund Income 569 2.556
Partnership Units Growth Fund 85
$500 Limited Liquidity Fund Income 81 .364
Partnership Units Growth Fund 87
$500 Limited Liquidity Fund Income 83 .373
Partnership Units Growth Fund 88
$500 Limited Liquidity Fund Income 85 .382
Partnership Units Growth Fund 89
$500 Limited Liquidity Fund High Yield 208 .934
Partnership Units Institutional Investors
$500 Limited LFG Liquidity Interest LP 21 .094
Partnership Units
$500 Limited Liquidity Fund Group LP 35 .157
Partnership Units
$500 Limited Liquidity Fund General 1 .004
Partnership Units Partners II
$500 Limited Liquidity Fund General 4 .018
Partnership Units Partners II
FBO Sean S. Subas
TOTAL 3,743 16.813%
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT, continued
The address for the above beneficial owners is P.O. Box 882044, San Francisco,
California 94188.
There are no parents of the Partnership. MultiVest Real Estate, Inc. a Delaware
corporation, serves as General Partner of the Partnership and, as such, controls
its activities. The Corporate General Partner currently owns 152 General
Partnership Units and 10 Limited Partnership Units. The two Individual General
Partners each own 38 General Partnership Units. (See Note 8 of Notes to
Financial Statements).
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership Agreement provides for payment to the General Partner of an
investment management fee of 10% of all cash proceeds (defined as net cash
realized from time to time upon the sale, refinancing or other disposition by
the Partnership of each property, or portion of any property, after provisions
for reserves which may be established in the sole discretion of the Corporate
General Partner). The Partnership Agreement also provides for payment to an
affiliate of the Corporate General Partner of real estate commissions in
connection with properties sold of an amount not to exceed the lesser of (a)
3% of the total consideration paid therefor, (b) 50% of a standard real estate
commission or (c) 50% of the fees permissible on the acquisition of a property.
According to the Partnership Agreement, these fees will be paid only after
payment to the Limited Partners of 100% of their initial capital account, plus
an amount equal to 12% per annum of the current capital account on a cumulative
basis, including all prior distributions.
As of the quarter ended March 31, 1991, the Limited Partners have received 100%
of their Initial Capital Account (as defined in the Agreement of Limited
Partnership of the Partnership), plus an amount equal to 12% per annum of the
Current Capital Account (as defined in the Agreement of Limited Partnership of
the Partnership), on a cumulative basis, including all prior distributions.
No Investment Management Fee/Real Estate Commission was paid to the Corporate
General Partner prior to 1991. However, as of the quarter ended March 31, 1991,
the Limited Partners have received 100% of their Initial Capital Account (as
defined in the Agreement of Limited Partnership of the Partnership), plus an
amount equal to 12% per annum of the Current Capital Account, (as defined in the
Agreement of Limited Partnership of the Partnership) on a cumulative basis,
including all prior distributions. An Investment Management Fee/Real Estate
Commission in the amount of $809,600 was earned by the General Partner during
1992 and 1993, $1,637,220 was earned during 1994, and $95,066 was earned during
1995. Additional fees may be due the General Partner as the Partnership
continues to receive cash proceeds. Future payments of the Investment
Management Fees/Real Estate Commissions are contingent upon a number
of factors. However, the actual amount which will ultimately be payable cannot
be determined with certainty or predicted at this time; the actual amount of the
Fee/Commission will be made from available cash, payment of any fee ultimately
earned is also contingent upon the Partnership having sufficient funds to make
the payment.
In addition, an affiliate of the General Partner has been engaged to service the
wrap-around mortgages held by the Partnership in accordance with the terms and
conditions of a Mortgage Servicing Agreement between the affiliate and the
Partnership.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, continued
It is anticipated that in order to protect the Partnership's interest in its
assets, such affiliate will continue to service each wrap-around mortgage or
other instrument now or hereafter held by the Partnership until full payment of
the corresponding wrap-around note or other obligation. For the year ended
December 31, 1995, the affiliate earned $15,143 for such services.
The Partnership Agreement provides that the Corporate General Partner has the
right and power to employ and dismiss from employment, persons in the operation
and management of the Partnership business, including but not limited to,
supervisory managing agents, building management agents, real estate brokers,
and loan brokers on such terms and for such compensation as the Corporate
General Partner shall determine. The Corporate General Partner is empowered to
employ in such capacities the Individual General Partners or an affiliate or
subsidiary of the Corporate General Partner on terms comparable to those
offered by unaffiliated firms.
At the time of the formation of the Partnership, the Individual General Partners
of the Partnership executed notes in favor of the Partnership as payment for
their General Partnership Units. Each note bears interest at 12% per annum and
requires the Individual General Partner to make an interest payment to the
Partnership of 4% per annum, with the remaining 8% payable at maturity of the
note. The Individual General Partners have no personal liability with respect
to their notes. On December 29, 1976 the General Partner, in order to enhance
the viability of the Partnership and to retain the Individual General Partners
(which retention was deemed desirable with regard to the tax status of the
Partnership) and to induce the Individual General Partners to remain as such,
agreed to defer, without any personal liability to the Individual General
Partners, all current interest payments and future interest payment obligations
on the notes until July 28, 1984. On July 26, 1984, the Corporate General
Partner further deferred payments on the Notes to ten (10) days after the date
of written demand for payment as such demand is determined by the Corporate
General Partner. These promissory notes have consistently been netted against
the General Partners' capital accounts which, in prior years, resulted in such
notes and capital not being reflected in the financial statements. As of
December 31, 1990, the notes were paid in full and the total value of the 228
units is being reflected as General Partner Capital. Income and losses are also
being allocated on a per unit basis to all units outstanding.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. Financial Statements.
See Index on Page 2 of this Form 10-K.
2. Financial Statement Schedules.
None.
3. Exhibits.
(i) Certificate of Limited Partnership - incorporated by
reference from annual report on Form 10-K for the
fiscal year ending December 31, 1982, Page 50.
(ii) Agreement of Limited Partnership - incorporated by
reference from annual report on Form 10-K for the fiscal
year ending December 31, 1982, Page 33.
(b) Reports on Form 8-K
None.
MULTIVEST REAL ESTATE FUND, LTD., SERIES VII
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange
Act of 1934, the Partnership has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
MULTIVEST REAL ESTATE FUND, LTD.,
SERIES VII, a Michigan Limited
Partnership,
By: MULTIVEST REAL ESTATE, INC.
a Delaware corporation
Its: Corporate General Partner
RICHARD L. DAVIS
Richard L. Davis
President, Chief Executive Officer
and Director
(Principal Executive Officer)
Date: March 28, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
RICHARD L. DAVIS
Richard L. Davis
President, Chief Executive Officer
and Director
Date: March 28, 1996
JAMES F. COLGAN
James F. Colgan
Director
Date: March 28, 1996
JOHN J. KAMMERER
John J. Kammerer
(Principal Accounting Officer)
Date: March 28, 1996